Future Business Leaders of America (FBLA) Agribusiness Practice Test

What is defined as supplies and materials used in production that were not consumed during the current year?

1. Working capital

2. Variable costs

3. Unused supplies

4. Whole business budget

The correct answer is: Unused supplies

The term that accurately describes supplies and materials used in production that were not consumed during the current year is "unused supplies." This concept refers to inventory or resources that were available for production but were not utilized within the specific time frame, indicating they remain on hand for future usage. Tracking unused supplies is vital for businesses as it helps in assessing inventory management and understanding the resource allocation within the production process. Working capital focuses on the liquidity available for day-to-day operations, while variable costs pertain to expenses that change in proportion to the activity level, such as materials and labor involved in production. The whole business budget is a financial plan that encompasses all aspects of a business’s operations but does not specifically denote supplies that remain unutilized in production. Understanding these distinctions helps clarify the role unused supplies play in agribusiness operations and inventory management.